Risk is drastically underpriced by markets. That's why the financial system collapsed in 2008. Markets are efficient until there is a fall in the rate of profit, at which point they collapse. The market continues to exist, but the costs of market re-correction are far too great to be considered efficient.
That quote of Adam Smith is totally made up... The real quote is this:
"[An individual], By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner to produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." (Book IV, Chapter 1 of the Wealth of Nations)
Risk is drastically underpriced by markets. That's why the financial system collapsed in 2008. Markets are efficient until there is a fall in the rate of profit, at which point they collapse. The market continues to exist, but the costs of market re-correction are far too great to be considered efficient.
00maharum00ma 1 year ago
That quote of Adam Smith is totally made up... The real quote is this:
"[An individual], By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner to produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." (Book IV, Chapter 1 of the Wealth of Nations)
00maharum00ma 1 year ago
this composite of videos came from hebnermodel d o t c o m
IndexFundsAdvisors 1 year ago